TUTTLE, Circuit Judge.
Local 24859, Optical Workers Union, AFL, and thirty-four members thereof here seek review
In this case, the volume of the employer's business satisfied the Board's prior jurisdictional limitations, laid down in October, 1950,
While the Trial Examiner's report was awaiting action by the Board, the Board
The petitioners here urge that the Board, while having the authority to decline jurisdiction over particular labor disputes on a case-by-case basis, cannot adopt a rule "legislating" a substantial number of employees and employers out of the administration of the Act. In the alternative, they contend that the rule adopted is an arbitrary one. Finally, they argue that it cannot be applied retroactively, because, they say, the Trial Examiner's finding that the employer was engaged in commerce within the meaning of the Act established N. L. R. B. jurisdiction as the law of the case.
At the outset, it will be observed that all of these objections stem from a view of the Board's powers and functions as legislative and judicial, or quasi-legislative and quasi-judicial, in character. These analogies, however, while they have been at times useful and convenient in explaining the law relative to administrative agencies, are not always valid or true to the fundamental principles which they are intended to serve.
It is true that some agencies, whose histories extend back to the early development of administrative law in this country, have had their powers and functions molded by decisional law into forms resembling the leading available models at the time, i. e., courts and legislatures. This mode of analysis did not prevail without well-reasoned dissent, however, and administrative agencies created under the later law were not given a judicial construction of their powers so closely simulated to these older forms.
Characteristic examples of this development may be found in the experience of the Interstate Commerce Commission and the Securities and Exchange Commission. Under the Interstate Commerce Act, railroad carriers were required to file schedules of rates with the Interstate Commerce Commission, and the granting of any lesser rate was declared to be unlawful.
In exercising these powers, the ICC on July 15, 1915, authorized a rate not exceeding $1.20 a ton for coal shipped from Alabama mines to Meridian, Mississippi. Thereafter, it granted several general increases and recommended one general reduction, without specifically authorizing an increase in this particular rate. The Southern Railway Co. and others, however, raised this rate whenever a general increase was allowed, and decreased it when the general reduction was recommended. The rate thus being charged by the carriers in 1925 was $2.03 a ton, and the Eagle Cotton Oil Company thereafter brought an action before the ICC for reparation, on the ground that this rate was excessive. The ICC ruled that the rate was excessive to the extent that it exceeded $1.85 from certain mines and $1.95 from other mines, prescribed these rates as reasonable for the future, and awarded reparation for the amount of the charges exceeding the $1.85 and $1.95 rates, for a period beginning two years before the proceeding was initiated
This court reversed on the narrow ground that the $2.03 rate had not been fixed or prescribed by the Commission. Judge Hutcheson, concurring specially, said that although the $2.03 rate had not been "specifically promulgated by the Commission", "I think it equally plain that, speaking generally, the rate had received the Commission's approval and sanction." He concluded that the ICC had "through a long course of practice * * * built up and established * * a character of flexibility in the matter of the approach to * * * rates and practices * * * in which the principle of res judicata or estoppel by decision has had and can have no just place." Eagle Cotton Oil Co. v. Southern Ry. Co., 5 Cir., 51 F.2d 443, 445, 446.
This view was rejected by the Supreme Court in Arizona Grocery Co. v. Atchison, Topeka & Santa Fe Ry. Co., 284 U.S. 370, 52 S.Ct. 183, 76 L.Ed. 348. The Court there analyzed the ICC's function under the Interstate Commerce Act as judicial in character, and under the Hepburn Act and the Transportation Act as legislative in character. It said that the two functions could be combined, but that
Justices Holmes and Brandeis dissented, "for the reasons stated by Judge Hutcheson in the concurring opinion in Eagle Cotton Oil Co. v. Southern Ry. Co., [5 Cir.] 51 F.2d 443, 445." Arizona Grocery Co. v. Atchison Ry., 284 U.S. 370, 390, 52 S.Ct. 183, 186.
If this defined the powers of the ICC in this regard, however, it did not establish a principle of general application, for essentially the same question was decided differently in Securities & Exchange Commission v. Chenery Corp., 332 U.S. 194, 67 S.Ct. 1575, 1760, 91 L. Ed. 1995. During the period when successive reorganization plans for a corporation were being submitted to the SEC, the officers, directors and controlling stockholders of the corporation purchased a substantial amount of the corporation's preferred stock on the over-the-counter market. Under the fourth reorganization plan, all preferred stock was to be converted into common stock of the surviving corporation. The SEC refused to approve this plan until it was amended to provide that the preferred stock purchased by insiders would not be converted, but would be surrendered at cost plus dividends accumulated since the purchase dates. The plan was so amended, over the insiders' objection, and approved. The Supreme Court reversed, on the ground that the case law cited as authority for the Commission's action did not in fact support it. Securities and Exchange Comm. v. Chenery Corp., 318 U.S. 80, 63 S.Ct. 454, 87 L.Ed. 626. On remand, the Commission still refused to approve the conversion of the insiders' preferred stock to new common stock, on the ground that such a transaction would be inconsistent with the standards of §§ 7 and 11 of the Holding Company Act, 15 U.S.C.A. §§ 79g, 79k.
This decision was appealed, and the Court upheld the Commission's order. It said that the grounds first advanced by the SEC in support of its action were erroneous, and where an administrative agency sets forth improper grounds for its decision, "the court is powerless to affirm the administrative action by substituting what it considers to be a more adequate or proper basis." It remarked that the SEC could act through the
Turning to the case before us, we find strong reason for shedding the confining analogies above adverted to. The National Labor Relations Board, even before the Taft-Hartley amendments gave it the task of policing a whole new set of unfair labor practices,
What the petitioners here complain of, therefore, is that the Board now acts under an announced policy, rather than a presumed policy, and that it has applied this policy retroactively to them, overturning "the law of the case." We hold in accordance with the Chenery case, supra, that the Board has authority to adopt and reverse policy, either in the form of an individual decision or as rulemaking for the future, in any manner reasonably calculated to carry out its statutory duties, without regard to whether such action strictly conforms to the rules applicable to courts or legislative bodies.
We thus hold that the Trial Examiner's finding that the employer was engaged in commerce within the meaning of the Act did not bind the Board as the law of the case, for that concept, also, has no place in circumscribing the Board's action. Finally, we see no merit in the petitioners' contention that the Board erred in not remanding the case for new findings regarding coverage under the current standards, when the petitioners did not set forth in their letter to the Board what new facts they expected would be shown in another hearing.
The order of the Board is